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March 20, 2013

Federal budget establishes long-term infrastructure plan and new skills training initiative

The 2013 federal budget is launching a new initiative for apprenticeship training and introduces a plan for the construction of long-term infrastructure, while maintaining a focus on eliminating the deficit.

“I think the budget generally sets the right tone for the way the government is going,” said Bill Stewart, vice president of Merit Contractors Association Alberta.

“The two most important things for the construction industry is the ongoing commitment for the training of skilled workers, as well as investment in a wide variety of infrastructure.”

Finance Minister Jim Flaherty presented the 2013 federal budget in Ottawa on March 21.

It is based on three main priorities: the introduction of the new Canada Job Grant; a new Building Canada Plan; and balancing the budget in 2015.

Flaherty said the Canada Job Grant is a bold and innovative initiative that will transform the way skills training is received, by matching the needs of employers with the training Canadians are getting.

The program will provide $15,000 or more per person for skills training. The federal government will provide up to $5,000 and that amount will be matched by the employer and the province/territory.

Some industry leaders argue that it is still too early to know what impact the new job grant will have on skills training.

“The devil is in the detail, but some concerns come immediately to mind,” said Tom Sigurdson, executive director of the British Columbia and Yukon Territory Building and Construction Trades Council.

“A budget is only a very small conceptual document. We will have to see an awful lot more detail to say how good the budget is. I have concerns with apprenticeships.”

For example, if an apprentice does 1,600 hours of practical work time and receives $5,000 from the federal government, the hourly rate for this apprentice is slightly more than $3 hour.

This is the amount that employers and the provincial government will have to match.

“I like the grant, but I don’t know what the provinces will do now with respect to apprenticeship training,” said Sigurdson.

“This is a huge concern. For some employers a $3 matching contribution could be a disincentive. It would be a lot different if they were sending the money collectively to the training centers, as opposed to providing $5,000 for the individual apprentice.“

For the first time, the Canada Job Grant will take skills-training choices out of the hands of government and put them in the hands of employers and Canadians seeking employment.

Stewart agreed with Sigurdson that it is still necessary to see all the supporting material and legislation to really understand how this new initiative will affect apprenticeship training.

“The budget is a framework and we will have to find out what the program details are,” said Stewart. “The proof will be in the pudding.”

The Canada Job Grant will be introduced as part of the renewal of the Labour Market Agreements in 2014-15.

The detailed design of the grant will be negotiated with provinces and territories over the next year, in consultation with employer associations, educational institutions and labour organizations.

Budget 2013 proposes to reallocate $4 million over three years to work with provinces and territories to harmonize requirements for apprentices, as well as examine the use of practical tests as a method of assessment, in targeted skilled trades.

The government is also changing its approach to procurement by introducing measures to support the use of apprentices in federal construction and maintenance contracts.

This will include funds that are transferred to provinces and territories through the Investment in affordable housing.

In addition, Budget 2013 is introducing a new Building Canada plan to build roads, bridges, public transit and other public infrastructure.

The plan will provide about $53 billion in investments for infrastructure, including more than $47 billion in new funding over 10 years, starting in 2014–15.

The deficit is projected to decline to $18.7 billion in 2013-14 from $25.9 billion in 2012-13.

It will continue to decline to $6.6 billion in 2014-15 and a surplus of $0.8 billion is expected in 2015–16.

A surplus of $5.1 billion is projected for 2017–18.

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